2020 (9) TMI 1140 - HC - Income Tax

Condonation of delay in filing the revised return - belated return u/s 139 (5) rejected by Principal Commissioner - HELD THAT - The delay that the petitioner sought to get condoned was only 42 days. Through Ext.P2 revised return, the petitioner had in fact brought to the notice of the Department, the details of tax that had been deducted at source from amounts received by the petitioner by way of compensation for land acquired from him during the previous year relevant to the assessment year Assessing authority cannot ignore the fact of deduction of tax at source, from payments made to the petitioner during the relevant previous year, while completing the assessment for the assessment year in question. This would be more so because, after deduction of tax at source, the person deducting tax at source would have issued the necessary intimation to the Income Tax Department while forwarding the deducted tax amounts to the Department on behalf of the petitioner assessee. No valid justification for the 4th respondent to have rejected the request of the petitioner under S. 119 (2) of the Act, more so when granting the relaxation as prayed for by the petitioner would not have prejudiced the interests of the department in any manner. Accordingly,quash Ext.P9 order and direct the respondents to consider the details given in Ext.P2 revised return also while finalising the assessment in relation to the petitioner for the assessment year 2014-2015 with consequential benefits.

Summary

Issues:
1. Condonation of delay in filing a revised return under the Income Tax Act for the assessment year 2014-2015.
2. Legality of the order rejecting the condonation application under Section 119(2) of the Income Tax Act.
3. Justification for rejecting the delay condonation application.
4. Consideration of tax deducted at source (TDS) in the assessment process.

Analysis:

1. The petitioner, an assessee under the Income Tax Act, filed a return for the assessment year 2014-2015 claiming a refund. Later, due to TDS deduction on compensation received for land acquisition, the petitioner revised the return. The Principal Commissioner rejected the application for condonation of delay in filing the revised return citing lack of supporting documents and financial hardship proof.

2. The respondents justified the rejection stating that since the initial return was belated, filing a revised return under Section 139(5) was not permissible. The petitioner referred to a court decision emphasizing the need to condone delay causing genuine hardship to the assessee.

3. The court observed that the Principal Commissioner's order could not be legally sustained. The petitioner had the right to file a revised return within one year from the end of the relevant assessment year. The court noted that the delay in filing the revised return was only 42 days and highlighted the importance of TDS details in the assessment process.

4. Despite the delay, the petitioner's submission of TDS details through the revised return was crucial for the assessment. The court found no valid reason for rejecting the condonation application, especially considering that granting the relaxation would not harm the department's interests. The court quashed the order and directed the respondents to consider the revised return details for finalizing the assessment, ensuring benefits for the petitioner.

In conclusion, the court ruled in favor of the petitioner, emphasizing the significance of TDS information in assessments and the need to consider genuine hardship in condoning delays under the Income Tax Act.